Agricultural Wage Rate Advice for 2017/18

Strutt & Parker is recommending a 1.4% increase
is applied to farmworkers’ wages this year, as a guide for employers
in England – who are no longer covered by the rates set down by an Agricultural
Wages Board.

Minimum wage levels for farmworkers are still set by an official
pay review body in Northern Ireland, Scotland and Wales.

However, in England the Agricultural
Wages Board (AWB) was disbanded
in 2013, so there are now no formal figures on which to base the
annual review which traditionally takes effect from October.

The recommendation would raise the Standard Worker’s rate (Grade
2) to £7.50/hr, mirroring the National Living Wage (NLW), and increasing
the Craftsman’s rate (Grade 4) to £8.85/hr, with other pay grades
rising accordingly.

George Chichester, farming consultant for Strutt & Parker,
said the business had made the recommendation to its clients based
on a number of factors.

“In coming to this conclusion, we have taken into account factors
including the approach taken by the remaining Agricultural Wages
Boards, the level of recent public sector pay awards, rising pension
contributions and the rate of inflation.

“The pay bodies in Northern Ireland, Scotland and Wales have all agreed
that the minimum rate for workers over 25 years of age should be the
same as the National Living Wage at £7.50/hr, with the equivalent of
the Craftman’s rate ranging between £8.46/hr and £8.72/hr.

“Generally speaking, public sector wage rises have again been capped
at 1% this year, as they have been for the previous three years, and
over the 12 months to July 2017 the Retail Price Index rose by 3.6%
and the Consumer Price Index by 2.6%.

“We have also taken into consideration that all employers are now
required to contribute to an employee’s pensions scheme, through auto-enrolment,
unless the employee has opted out.

“Currently the minimum contribution is 1% of earnings, but this will
rise to 2% in April 2018 (and to 3% in April 2019) – equating to an
additional 1% above and beyond the pay award, albeit delayed for six
months.”

Mr Chichester warned that there was an unfortunate flip-side for employees,
in that their own contribution to their pension fund is required to
rise to 3% next April and then to 5% in April 2019.

“These total contributions belong to the employee, and benefit from
a further top-up by way of tax rebate, but the money is effectively
locked away until retirement and therefore an employee’s take-home
pay might in practice fall over the next year, despite an increase
in the rate of pay. Morally, this puts the employer in an awkward position.”

However, Mr Chichester pointed out the basic wage rates for most public
sector workers do not take into account a range of other perks which
might apply to farmworkers, such as free housing and no commuting costs.

Many employers have also chosen to move to paying their workers, particularly
highly-trained operators, a salary, rather than an hourly wage and
overtime.